UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-3143
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TEMPLETON GLOBAL SMALLER COMPANIES FUND, INC.
---------------------------------------------------
(Exact name of registrant as specified in charter)

500 EAST BROWARD BLVD., FORT LAUDERDALE, FL 33394-3091
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(Address of principal executive offices) (Zip code)

MURRAY L. SIMPSON, ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906
-----------------------------------------------------------------
(Name and address of agent for service)

Registrant's telephone number, including area code: (954) 527-7500
--------------

Date of fiscal year end: 8/31
----

Date of reporting period: 2/29/04
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ITEM 1. REPORTS TO STOCKHOLDERS

FEBRUARY 29, 2004

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SEMIANNUAL REPORT AND SHAREHOLDER LETTER GLOBAL

WANT TO RECEIVE
TEMPLETON GLOBAL THIS DOCUMENT
SMALLER COMPANIES FUND, INC. FASTER VIA EMAIL?

Eligible
shareholders can
sign up for eDelivery at
franklintempleton.com.
see inside for details.

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[logo omitted]
FRANKLIN(R) TEMPLETON(R)
INVESTMENTS
Franklin o TEMPLETON o Mutual Series
page
Franklin Templeton Investments

GAIN FROM OUR PERSPECTIVE

Franklin Templeton's distinct multi-manager structure combines the specialized
expertise of three world-class investment management groups--Franklin, Templeton
and Mutual Series.

SPECIALIZED EXPERTISE

Each of our portfolio management groups operates autonomously, relying on its
own research and staying true to the unique investment disciplines that underlie
its success.

FRANKLIN. Founded in 1947, Franklin is a leader in tax-free investing and a
driving force in fixed income investing around the globe. They also bring
expertise in growth- and value-style U.S. equity investing.

TEMPLETON. Founded in 1940, Templeton pioneered international investing and, in
1954, launched what has become the industry's oldest global fund. Today, with
research offices in over 25 countries, they offer investors the broadest global
reach in the industry.

MUTUAL SERIES. Established in 1949, Mutual Series is dedicated to a unique style
of value investing, searching aggressively for opportunity among undervalued
stocks, arbitrage situations and distressed companies.

TRUE DIVERSIFICATION

Because our management groups work independently and adhere to distinctly
different investment approaches, Franklin, Templeton and Mutual Series funds
typically have a low overlap of securities. That's why our funds can be used to
build truly diversified portfolios covering every major asset class.

RELIABILITY YOU CAN TRUST

At Franklin Templeton Investments, we seek to consistently provide investors
with exceptional risk-adjusted returns over the long term, as well as the
reliable account services that have helped us become one of the most trusted
names in financial services.

MUTUAL FUNDS | RETIREMENT PLANS | 529 COLLEGE SAVINGS PLANS | SEPARATE ACCOUNTS

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Not part of the semiannual report
page

Contents

SHAREHOLDER LETTER ................................. 1

SEMIANNUAL REPORT

Templeton Global Smaller
Companies Fund ..................................... 3

Performance Summary ................................ 7

Financial Highlights and
Statement of Investments ........................... 10

Financial Statements ............................... 18

Notes to Financial Statements ...................... 22

Proxy Voting Policies and Procedures ............... 28

Semiannual Report

Templeton Global Smaller
Companies Fund

YOUR FUND'S GOAL AND PRIMARY INVESTMENTS: Templeton Global Smaller Companies
Fund seeks to achieve long-term capital growth. Under normal market conditions,
the Fund invests at least 80% of its net assets in smaller companies, as defined
in the Fund's prospectus.

We are pleased to bring you Templeton Global Smaller Companies Fund's semiannual
report covering the period ended February 29, 2004.

PERFORMANCE OVERVIEW

For the six months under review, the Fund's Class A shares posted a 26.30%
cumulative total return, as shown in the Performance Summary beginning on page
7. The Fund outperformed its benchmark, the Morgan Stanley Capital International
(MSCI) World Index, which posted an 18.97% cumulative total return for the same
period. 1

ECONOMIC AND MARKET OVERVIEW

The global economy continued to improve during the six-month period ended
February 29, 2004. This was the main contributor to strong total returns for
most local stock market indexes. The MSCI World Index returned 18.97% and the
MSCI Europe Australasia Far East (EAFE) Index returned 25.30% for the period
under review. 2

Economic growth was partially reflected in a synchronized global recovery in
corporate profitability. As of the end of 2003, corporate profits in the U.S.
and the U.K. reached new highs, up 82% and 29% from their recession lows in
2001. 3 Corporate profits in Japan and Canada were still below recent highs;
however, they increased 32% and 47% from their respective recession low points
in 2001. 3

1. Source: Standard & Poor's Micropal. The MSCI World Index is a free
float-adjusted, market capitalization-weighted index designed to measure equity
market performance in global developed markets. The index is unmanaged and
includes reinvested dividends. One cannot invest directly in an index, nor is an
index representative of the Fund's portfolio.

2. Source: Standard & Poor's Micropal. See footnote 1 for a description of the
MSCI World Index. The MSCI EAFE Index is a free float-adjusted, market
capitalization-weighted index designed to measure equity market performance in
global developed markets excluding the U.S. and Canada. The index is unmanaged
and includes reinvested dividends. One cannot invest directly in an index, nor
is an index representative of the Fund's portfolio.

3. Source: ISI Group.

THE DOLLAR VALUE, NUMBER OF SHARES OR PRINCIPAL AMOUNT, AND NAMES OF ALL
PORTFOLIO HOLDINGS ARE LISTED IN THE FUND'S STATEMENT OF INVESTMENTS (SOI). THE
SOI BEGINS ON PAGE 14.

Semiannual Report | 3
page

[graphic omitted]
edgar representation of data points used in printed graphic as follows:

GEOGRAPHIC DISTRIBUTION
Based on Total Net Assets as of 2/29/04
Europe 38.4%
Asia 26.7%
North America 18.4%
Australia & New Zealand 6.2%
Latin America 2.1%
Middle East & Africa 1.2%
Short-Term Investments & Other Net Assets 7.0%

A theme that was still unfolding in the global economy was China's role as a
main driver in the current recovery. In 2003, 80% of the world's export growth
resulted from greater demand in China. While Japan's exports to China grew 27%
compared with the previous year, U.S. exports grew 54%. 3 As China continued to
industrialize and build its infrastructure (roads, bridges and energy
generation), global demand for commodities intensified, leading to higher prices
of those commodities. In 2003, prices for aluminum contracts rose 19% over the
previous year, silver 24%, zinc 33%, and copper 50%. 4

Historically, surges in commodity prices have generally coincided with labor
shortages and wage inflation, leading to overall inflation and monetary
tightening. However, the current abundant labor supply in the U.S., China and
India, and China's ability to provide low-cost products to many large economies,
have resulted in less inflationary pressure.

In the currency market, the U.S. dollar appreciated versus the euro in the first
two months of 2004. This was a reversal of the trend toward a lower dollar over
the past several months. In 2003, the dollar declined 17% in value versus the
euro. 5 In the short term, a lower dollar boosts total returns generated in
currencies that have appreciated versus the dollar; however, it makes U.S.
operations of foreign-based companies appear less profitable and eventually
increases the cost of U.S. imports.

INVESTMENT STRATEGY

At Templeton, we take a long-term, value-oriented approach to investing. We
focus our analysis primarily at the company level; we seek to identify when a
company's value on the stock exchange is substantially below our estimate of the
company's underlying worth -- also known as its "intrinsic value." Our analysts
determine the intrinsic value of a company first by understanding the company
and the industry in which it operates, and then by forecasting future earnings
and cash flow growth. We look to invest in those companies selling at the lowest
level relative to our expectations for future earnings and cash flow. We are
patient investors; our typical holding period is four to five years.

In looking for opportunities, we put less emphasis on the current situation and
more on what we believe could materialize in the future. Hence, the greatest
opportunities often can be in companies that are out of favor -- they may be
undergoing a restructuring, the business cycle may have turned against them, or
they may have been oversold due to temporary difficulties that our analysis
indicates have been over-discounted by the market.

4. Sources: Reuters, Commodity Research Bureau Index; London Metal Exchange.
5. Source: European Central Bank.

4 | Semiannual Report
page

MANAGER'S DISCUSSION

During the six-month period, the Fund benefited from strong performance of
several stocks. For example, we owned shares of Gail India, the country's
largest natural gas transmission company. Gail's shares appreciated 60.5% in
U.S. dollar terms as India's estimated demand for natural gas far outstripped
its availability. Natural gas demand grew robustly because of rising industrial
production, coupled with the low cost of natural gas relative to alternative
fuels. Despite its recently strong performance, we continued to view Gail common
shares as attractive at period-end.

The Fund also benefited from its holding of Aalberts Industries, which rose
42.4% in U.S. dollar terms. Aalberts is a Dutch-based engineering group that
manufactures high-grade industrial products. The company was a strong
beneficiary of Europe's improving economic conditions, as it is a leading
supplier to many European industrial concerns. Consistent with our strategy, we
believed the company's operating margins might improve, as capacity utilization
rates held the potential to rise from sub-par levels amid economic strength. We
also considered Aalberts attractive because it has a solid track record of
finding acquisitions that add value. Although we did take profits during the
period, we believe this trend may continue due to the fragmentation of the
markets where the company operates. Aalberts' price/earnings ratio was 13.6 at
period-end -- according to our analysis it remained undervalued with the
potential for significant future earnings growth.

Corporacion Geo is another example of a stock that contributed to Fund
performance during the period. Geo is a fully integrated homebuilder, engaged in
all aspects of design, development and construction of entry level housing for
low-income Mexican families. Over the last 18 months, Geo met or exceeded the
operating and financial targets that it had previously articulated to investors.
Geo's stock appreciated 57.9% in U.S. dollar terms during the six months under
review as the market continued to reward Geo's compelling growth opportunity.

Despite the Fund's excellent results, some of our holdings did not perform well
and detracted from Fund performance. These included Fountain Set Holdings and
Texwinca Holdings. Fountain Set and Texwinca are Asian manufacturers and
suppliers of cotton knitted fabrics. The companies' products are supplied to
garment manufacturers, who then produce apparel for some of the world's most
popular brands. Both stocks came under pressure as a result of a surge in cotton
prices. Cotton accounts for a large portion of knitted fabric manufacturing
costs. Both companies were unable to pass along the entire commodity price
increase to their customers, resulting in margin pressure. At period-end,
consistent with our strategy, we believed the shares remained attractive for the
longer term, as cotton prices are expected to ultimately weaken again. Also,
both companies possess vertically

TOP 10 HOLDINGS
2/29/04

- ----------------------------------------------------
Company % OF TOTAL
SECTOR/INDUSTRY, COUNTRY NET ASSETS
- ----------------------------------------------------
Giordano International Ltd. 2.1%
SPECIALTY RETAIL, HONG KONG
- ----------------------------------------------------
OPG Groep NV 2.1%
HEALTH CARE PROVIDERS & SERVICES,
NETHERLANDS
- ----------------------------------------------------
Vestas Wind Systems AS 2.0%
ELECTRICAL EQUIPMENT, DENMARK
- ----------------------------------------------------
Aalberts Industries NV 1.9%
INDUSTRIAL CONGLOMERATES, NETHERLANDS
- ----------------------------------------------------
Hung Hing Printing Group Ltd. 1.8%
PAPER & FOREST PRODUCTS, HONG KONG
- ----------------------------------------------------
Gujarat Ambuja Cements Ltd. 1.8%
CONSTRUCTION MATERIALS, INDIA
- ----------------------------------------------------
SIG Holding AG 1.6%
MACHINERY, SWITZERLAND
- ----------------------------------------------------
Iluka Resources Ltd. 1.6%
METALS & MINING, AUSTRALIA
- ----------------------------------------------------
D. Carnegie & Co. AB 1.6%
DIVERSIFIED FINANCIAL SERVICES, SWEDEN
- ----------------------------------------------------
Vedior NV 1.5%
COMMERCIAL SERVICES & SUPPLIES,
NETHERLANDS
- ----------------------------------------------------

Semiannual Report | 5
page

integrated fabric-manufacturing facilities. Vertical integration allows for the
production of fine quality fabrics at the most competitive prices. Economies of
scale and the large amount of capital required for the manufacturing of knitted
fabrics also create significant barriers to entry and add to the attractiveness
of these companies, in our opinion.

Thank you for investing in Templeton Global Smaller Companies Fund. We welcome
your questions and comments, and look forward to serving your future investment
needs.

[photo omitted]

/s/Tucker Scott
Tucker Scott, CFA

[photo omitted]

/s/Simon Rudolph
Simon Rudolph, ACA

[photo omitted]

/s/Cynthia Sweeting
Cynthia Sweeting, CFA

Portfolio Management Team
Templeton Global Smaller Companies Fund, Inc.

THIS DISCUSSION REFLECTS OUR ANALYSIS, OPINIONS AND PORTFOLIO HOLDINGS AS OF
FEBRUARY 29, 2004, THE END OF THE REPORTING PERIOD. THE WAY WE IMPLEMENT OUR
MAIN INVESTMENT STRATEGIES AND THE RESULTING PORTFOLIO HOLDINGS MAY CHANGE
DEPENDING ON FACTORS SUCH AS MARKET AND ECONOMIC CONDITIONS. THESE OPINIONS MAY
NOT BE RELIED UPON AS INVESTMENT ADVICE OR AN OFFER FOR A PARTICULAR SECURITY.
THE INFORMATION IS NOT A COMPLETE ANALYSIS OF EVERY ASPECT OF ANY MARKET,
COUNTRY, INDUSTRY, SECURITY OR THE FUND. STATEMENTS OF FACT ARE FROM SOURCES
CONSIDERED RELIABLE, BUT THE INVESTMENT MANAGER MAKES NO REPRESENTATION OR
WARRANTY AS TO THEIR COMPLETENESS OR ACCURACY. ALTHOUGH HISTORICAL PERFORMANCE
IS NO GUARANTEE OF FUTURE RESULTS, THESE INSIGHTS MAY HELP YOU UNDERSTAND OUR
INVESTMENT MANAGEMENT PHILOSOPHY.

6 | Semiannual Report
page

Performance Summary as of 2/29/04

Your dividend income will vary depending on dividends or interest paid by
securities in the Fund's portfolio, adjusted for operating expenses of each
class. Capital gain distributions are net profits realized from the sale of
portfolio securities. The performance table does not reflect any taxes due on
Fund dividends, capital gain distributions, if any, or any realized gains on the
sale of Fund shares. Total return reflects the Fund's dividend income, capital
gain distributions, if any, and any unrealized gains or losses.

PRICE AND DISTRIBUTION INFORMATION

- --------------------------------------------------------------------------------------------------------
CLASS A CHANGE 2/29/04 8/31/03
- --------------------------------------------------------------------------------------------------------

Net Asset Value (NAV) +$1.76 $8.92 $7.16
- --------------------------------------------------------------------------------------------------------
DISTRIBUTIONS (9/1/03-2/29/04)
- --------------------------------------------------------------------------------------------------------
Dividend Income $0.1043
- --------------------------------------------------------------------------------------------------------
CLASS B CHANGE 2/29/04 8/31/03
- --------------------------------------------------------------------------------------------------------
Net Asset Value (NAV) +$1.70 $8.67 $6.97
- --------------------------------------------------------------------------------------------------------
DISTRIBUTIONS (9/1/03-2/29/04)
- --------------------------------------------------------------------------------------------------------
Dividend Income $0.0866
- --------------------------------------------------------------------------------------------------------
CLASS C CHANGE 2/29/04 8/31/03
- --------------------------------------------------------------------------------------------------------
Net Asset Value (NAV)* +$1.74 $8.80 $7.06
- --------------------------------------------------------------------------------------------------------
DISTRIBUTIONS (9/1/03-2/29/04)
- --------------------------------------------------------------------------------------------------------
Dividend Income $0.0594
- --------------------------------------------------------------------------------------------------------
ADVISOR CLASS CHANGE 2/29/04 8/31/03
- --------------------------------------------------------------------------------------------------------
Net Asset Value (NAV)* +$1.75 $8.93 $7.18
- --------------------------------------------------------------------------------------------------------
DISTRIBUTIONS (9/1/03-2/29/04)
- --------------------------------------------------------------------------------------------------------
Dividend Income $0.1247
- --------------------------------------------------------------------------------------------------------

*NAV does not agree to NAV disclosed in the accompanying Financial Statements
due to financial statement adjusting entries posted as of period-end.

Semiannual Report | Past performance does not guarantee future results. | 7
page

Performance Summary (CONTINUED)

PERFORMANCE

- -----------------------------------------------------------------------------------------------------------------------------------
CLASS A 6-MONTH 1-YEAR 5-YEAR 10-YEAR
- -----------------------------------------------------------------------------------------------------------------------------------

Cumulative Total Return 1 26.30% 80.50% 61.18% 87.48%
Average Annual Total Return 2 18.99% 69.98% 8.71% 5.86%
Value of $10,000 Investment 3 $11,899 $16,998 $15,184 $17,679
Avg. Ann. Total Return (3/31/04) 4 66.87% 7.81% 6.08%
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS B 6-MONTH 1-YEAR 5-YEAR INCEPTION (1/1/99)
- -----------------------------------------------------------------------------------------------------------------------------------
Cumulative Total Return 1 25.86% 79.03% 54.77% 43.09%
Average Annual Total Return 2 21.86% 75.03% 8.84% 7.04%
Value of $10,000 Investment 3 $12,186 $17,503 $15,277 $14,209
Avg. Ann. Total Return (3/31/04) 4 71.98% 7.94% 6.61%
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS C 6-MONTH 1-YEAR 5-YEAR INCEPTION (5/1/95)
- -----------------------------------------------------------------------------------------------------------------------------------
Cumulative Total Return 1 25.64% 79.20% 55.35% 79.58%
Average Annual Total Return 2 24.64% 78.20% 9.21% 6.85%
Value of $10,000 Investment 3 $12,464 $17,820 $15,535 $17,958
Avg. Ann. Total Return (3/31/04) 4 74.84% 8.28% 6.61%
- -----------------------------------------------------------------------------------------------------------------------------------
ADVISOR CLASS 5 6-MONTH 1-YEAR 5-YEAR 10-YEAR
- -----------------------------------------------------------------------------------------------------------------------------------
Cumulative Total Return 1 26.42% 81.17% 63.48% 91.97%
Average Annual Total Return 2 26.42% 81.17% 10.33% 6.74%
Value of $10,000 Investment 3 $12,642 $18,117 $16,348 $19,197
Avg. Ann. Total Return (3/31/04) 4 77.83% 9.41% 6.96%
- -----------------------------------------------------------------------------------------------------------------------------------

PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. ONGOING MARKET VOLATILITY
CAN SIGNIFICANTLY AFFECT SHORT-TERM PERFORMANCE; MORE RECENT RETURNS MAY DIFFER
FROM THOSE SHOWN. SINCE MARKETS CAN GO DOWN AS WELL AS UP, INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE WITH MARKET CONDITIONS, AND YOU MAY HAVE A GAIN
OR LOSS WHEN YOU SELL YOUR SHARES.

FOR MOST RECENT MONTH-END PERFORMANCE, SEE "FUNDS AND PERFORMANCE" AT
FRANKLINTEMPLETON.COM OR CALL 1-800/342-5236.

8 | Past performance does not guarantee future results. | Semiannual Report
page

Performance Summary (CONTINUED)

ENDNOTES

THE FUND INVESTS IN FOREIGN SECURITIES, WHICH CAN INVOLVE EXPOSURE TO CURRENCY
VOLATILITY AND POLITICAL, ECONOMIC AND REGULATORY UNCERTAINTY. INVESTMENTS IN
DEVELOPING MARKETS INVOLVE HEIGHTENED RISKS RELATED TO THE SAME FACTORS, IN
ADDITION TO THOSE ASSOCIATED WITH THEIR RELATIVELY SMALL SIZE AND LESSER
LIQUIDITY. IN ADDITION, SMALLER-COMPANY STOCKS HAVE HISTORICALLY EXHIBITED
GREATER PRICE VOLATILITY THAN LARGER-COMPANY STOCKS, PARTICULARLY OVER THE SHORT
TERM. THE FUND'S PROSPECTUS ALSO INCLUDES A DESCRIPTION OF THE MAIN INVESTMENT
RISKS.

CLASS A: Subject to the current, maximum 5.75% initial sales charge.
Prior to 7/1/92, Fund shares were offered at a higher initial
sales charge. Thus actual total returns would have been lower.
Effective 1/1/93, the Fund implemented a Rule 12b-1 plan, which
affects subsequent performance.

CLASS B: Subject to no initial sales charge, but subject to a contingent
deferred sales charge (CDSC) declining from 4% to 0% over six
years. These shares have higher annual fees and expenses than
Class A shares.

CLASS C: Subject to no initial sales charge, but subject to 1% CDSC for
shares redeemed within 12 months of investment. Prior to 1/1/04,
these shares were offered with an initial sales charge; thus
actual returns would have differed. These shares have higher
annual fees and expenses than Class A shares.

ADVISOR CLASS: No initial sales charge or Rule 12b-1 fees; shares are available
to a limited class of investors.

1. Cumulative total return represents the change in value of an investment over
the periods indicated and does not include sales charges.

2. Average annual total return represents the average annual change in value of
an investment over the periods indicated and includes any current, applicable,
maximum sales charge(s). Six-month return has not been annualized.

3. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the periods indicated and include any current, applicable, maximum
sales charge(s).

4. In accordance with SEC rules, we provide standardized average annual total
return information through the latest calendar quarter.

5. Effective 1/2/97, the Fund began offering Advisor Class shares, which do not
have sales charges or a Rule 12b-1 plan. Performance quotations for this class
reflect the following methods of calculation: (a) For periods prior to 1/2/97, a
restated figure is used based upon the Fund's Class A performance, excluding the
effect of Class A's maximum initial sales charge, but reflecting the effect of
the Class A Rule 12b-1 fees; and (b) for periods after 1/1/97, actual Advisor
Class performance is used reflecting all charges and fees applicable to that
class. Since 1/2/97 (commencement of sales), the cumulative and average annual
total returns of Advisor Class shares were 44.99% and 5.32%.

Semiannual Report | Past performance does not guarantee future results. | 9
page

Templeton Global Smaller Companies Fund, Inc.

FINANCIAL HIGHLIGHTS

-----------------------------------------------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED AUGUST 31,
CLASS A (UNAUDITED) 2003 2002 2001 2000 1999
-----------------------------------------------------------------------------

PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)

Net asset value, beginning of period ............... $7.16 $5.82 $6.10 $7.30 $7.40 $6.90
-----------------------------------------------------------------------------

Income from investment operations:

Net investment income (loss) a .................... (.01) .07 .05 .07 .11 .13

Net realized and unrealized gains (losses) ........ 1.87 1.32 (.27) (.98) .35 .66
-----------------------------------------------------------------------------

Total from investment operations ................... 1.86 1.39 (.22) (.91) .46 .79
-----------------------------------------------------------------------------

Less distributions from:

Net investment income ............................. (.10) (.05) (.06) (.10) (.17) (.11)

Net realized gains ................................ -- -- -- (.19) (.39) (.18)
-----------------------------------------------------------------------------

Total distributions ................................ (.10) (.05) (.06) (.29) (.56) (.29)
-----------------------------------------------------------------------------

Redemption fees .................................... -- c -- c -- -- -- --
-----------------------------------------------------------------------------

Net asset value, end of period ..................... $8.92 $7.16 $5.82 $6.10 $7.30 $7.40
=============================================================================

Total return b ..................................... 26.30% 24.09% (3.59)% (12.50)% 7.09% 11.96%

RATIOS/SUPPLEMENTAL DATA

Net assets, end of period (000's) .................. $861,180 $691,103 $565,680 $647,893 $952,784 $1,059,988

Ratios to average net assets:

Expenses .......................................... 1.36% d 1.46% 1.44% 1.46% 1.37% 1.39%

Net investment income (loss) ...................... (.23)% d 1.18% .82% 1.07% 1.60% 1.90%

Portfolio turnover rate ............................ 1.4617.76% 29.51% 25.31% 36.65% 27.19% 14.04%

aBased on average daily shares outstanding.
bTotal return does not reflect sales commissions or the contingent deferred
sales charge, and is not annualized for periods less than one year.
cAmount is less than $0.001 per share.
dAnnualized.

10 | Semiannual Report
page

Templeton Global Smaller Companies Fund, Inc.

FINANCIAL HIGHLIGHTS (CONTINUED)

-----------------------------------------------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED AUGUST 31,
CLASS B (UNAUDITED) 2003 2002 2001 2000 1999 d
-----------------------------------------------------------------------------

PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)

Net asset value, beginning of period ............... $6.97 $5.70 $5.99 $7.20 $7.36 $7.02
-----------------------------------------------------------------------------

Income from investment operations:

Net investment income (loss) a .................... (.04) .03 .02 .03 .07 .07

Net realized and unrealized gains (losses) ........ 1.83 1.27 (.28) (.97) .32 .27
-----------------------------------------------------------------------------

Total from investment operations ................... 1.79 1.30 (.26) (.94) .39 .34
-----------------------------------------------------------------------------

Less distributions from:

Net investment income ............................. (.09) (.03) (.03) (.08) (.16) --

Net realized gains ................................ -- -- -- (.19) (.39) --
-----------------------------------------------------------------------------

Total distributions ................................ (.09) (.03) (.03) (.27) (.55) --
-----------------------------------------------------------------------------

Redemption fees .................................... -- c -- c -- -- -- --
-----------------------------------------------------------------------------

Net asset value, end of period ..................... $8.67 $6.97 $5.70 $5.99 $7.20 $7.36
=============================================================================

Total return b ..................................... 25.86% 22.97% (4.25)% (13.13)% 6.01% 4.84%

RATIOS/SUPPLEMENTAL DATA

Net assets, end of period (000's) .................. $6,677 $3,171 $1,409 $333 $519 $220

Ratios to average net assets:

Expenses .......................................... 2.11% e 2.21% 2.19% 2.20% 2.11% 2.21% e

Net investment income (loss) ...................... (.98)% e .43% .07% .53% .98% 1.38% e

Portfolio turnover rate ............................ 17.76% 29.51% 25.31% 36.65% 27.19% 14.04%

aBased on average daily shares outstanding.
bTotal return does not reflect the contingent deferred sales charge and is not
annualized for periods less than one year.
cAmount is less than $0.001 per share.
dFor the period January 1, 1999 (effective date) to August 31, 1999.
eAnnualized.

Semiannual Report | 11
page

Templeton Global Smaller Companies Fund, Inc.

FINANCIAL HIGHLIGHTS (CONTINUED)

-----------------------------------------------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED AUGUST 31,
CLASS C (UNAUDITED) 2003 2002 2001 2000 1999
-----------------------------------------------------------------------------

PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)

Net asset value, beginning of period ............... $7.05 $5.75 $6.00 $7.19 $7.27 $6.78
-----------------------------------------------------------------------------

Income from investment operations:

Net investment income (loss) a .................... (.04) .02 .01 .02 .05 .08

Net realized and unrealized gains (losses) ........ 1.86 1.30 (.26) (.96) .35 .65
-----------------------------------------------------------------------------

Total from investment operations ................... 1.82 1.32 (.25) (.94) .40 .73
-----------------------------------------------------------------------------

Less distributions from:

Net investment income ............................. (.06) (.02) -- d (.06) (.09) (.06)

Net realized gains ................................ -- -- -- (.19) (.39) (.18)
-----------------------------------------------------------------------------

Total distributions ................................ (.06) (.02) -- (.25) (.48) (.24)
-----------------------------------------------------------------------------

Redemption fees .................................... -- c -- c -- -- -- --
-----------------------------------------------------------------------------

Net asset value, end of period ..................... $8.81 $7.05 $5.75 $6.00 $7.19 $7.27
=============================================================================

Total return b ..................................... 25.64% 23.17% (4.12)% (13.17)% 6.15% 11.28%

RATIOS/SUPPLEMENTAL DATA

Net assets, end of period (000's) .................. $29,995 $17,347 $12,894 $13,348 $20,729 $29,523

Ratios to average net assets:

Expenses .......................................... 2.11% e 2.20% 2.17% 2.20% 2.11% 2.13%

Net investment income (loss) ...................... (.98)% e .44% .09% .33% .79% 1.11%

Portfolio turnover rate ............................ 17.76% 29.51% 25.31% 36.65% 27.19% 14.04%

aBased on average daily shares outstanding.
bTotal return does not reflect the contingent deferred sales charge and is not
annualized for periods less than one year.
cAmount is less than $0.001 per share.
dActual distribution from net investment income per share was $.003.
eAnnualized.

12 | Semiannual Report
page

Templeton Global Smaller Companies Fund, Inc.

FINANCIAL HIGHLIGHTS (CONTINUED)

-----------------------------------------------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2004 YEAR ENDED AUGUST 31,
-----------------------------------------------------------------------------
ADVISOR CLASS (UNAUDITED) 2003 2002 2001 2000 1999

PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)

Net asset value, beginning of period ............... $7.17 $5.84 $6.12 $7.31 $7.42 $6.91
-----------------------------------------------------------------------------

Income from investment operations:

Net investment income (loss) a .................... -- c .06 .07 .07 .14 .16

Net realized and unrealized gains (losses) ........ 1.89 1.33 (.28) (.96) .34 .65
-----------------------------------------------------------------------------

Total from investment operations ................... 1.89 1.39 (.21) (.89) .48 .81
-----------------------------------------------------------------------------
Less distributions from:

Net investment income ............................. (.13) (.06) (.07) (.11) (.20) (.12)

Net realized gains ................................ -- -- -- (.19) (.39) (.18)
-----------------------------------------------------------------------------

Total distributions ................................ (.13) (.06) (.07) (.30) (.59) (.30)
-----------------------------------------------------------------------------
Redemption fees .................................... -- d -- d -- -- -- --
-----------------------------------------------------------------------------
Net asset value, end of period ..................... $8.93 $7.17 $5.84 $6.12 $7.31 $7.42
=============================================================================

Total return b ..................................... 26.42% 24.39% (3.27)% (12.16)% 7.34% 12.33%

RATIOS/SUPPLEMENTAL DATA

Net assets, end of period (000's) .................. $8,547 $4,834 $10,344 $2,929 $10,234 $6,236

Ratios to Average Net Assets:

Expenses .......................................... 1.11% e 1.21% 1.19% 1.21% 1.12% 1.14%

Net investment income (loss) ...................... .02% e 1.43% 1.07% 1.10% 1.93% 2.26%

Portfolio turnover rate ............................ 17.76% 29.51% 25.31% 36.65% 27.19% 14.04%

aBased on average daily shares outstanding.
bTotal return is not annualized for periods less than one year.
cActual net investment income (loss) was $(.003).
dAmount is less than $0.001 per share.
eAnnualized.

Semiannual Report | See notes to financial statements. | 13
page

Templeton Global Smaller Companies Fund, Inc.

STATEMENT OF INVESTMENTS, FEBRUARY 29, 2004 (UNAUDITED)

- ------------------------------------------------------------------------------------------------------------------------------------
INDUSTRY SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------

COMMON STOCKS 91.5%
AUSTRALIA 5.3%
APN News & Media Ltd. ..................... Media 3,746,205 $ 11,128,000
Billabong Internatational Ltd. ............ Textiles Apparel & Luxury Goods 369,406 2,117,667
Iluka Resources Ltd. ...................... Metals & Mining 4,549,820 14,533,138
John Fairfax Holdings Ltd. ................ Media 4,209,800 11,010,981
Promina Group Ltd. ........................ Insurance 3,305,000 9,001,419
---------------
47,791,205
---------------
BERMUDA .1%
Axis Capital Holdings Ltd. ................ Insurance 31,100 948,861
---------------
CANADA 6.7%
Abitibi-Consolidated Inc. ................. Paper & Forest Products 558,470 4,411,986
a ATI Technologies Inc. ..................... Semiconductors & Semiconductor Equipment 278,600 4,318,897
Canadian Natural Resources Ltd. ........... Oil & Gas 73,421 4,025,673
Canadian Natural Resources Ltd.
(CAD Traded) ............................ Oil & Gas 36,251 1,979,047
a GSI Lumonics Inc. ......................... Electronic Equipment & Instruments 698,000 9,884,107
Legacy Hotels REIT ........................ Consumer Finance 1,128,100 6,305,757
Linamar Corp. ............................. Auto Components 690,000 6,649,301
National Bank of Canada ................... Commercial Banks 226,400 7,702,746
a Precision Drilling Corp. .................. Energy Equipment & Services 180,000 8,599,218
Quebecor World Inc. ....................... Commercial Services & Supplies 356,850 6,925,563
---------------
60,802,295
---------------
CHINA 2.3%
a China Resources Power Co. Ltd. ............ Electric Utilities 22,636,000 12,722,817
a Weiqiao Textile Co. ....................... Textiles Apparel & Luxury Goods 2,393,000 4,181,067
a Weiqiao Textile Co., 144A ................. Textiles Apparel & Luxury Goods 2,140,000 3,739,024
---------------
20,642,908
---------------
DENMARK 3.1%
a ISS A/S ................................... Commercial Services & Supplies 179,500 10,026,094
Vestas Wind Systems AS .................... Electrical Equipment 955,140 18,154,922
---------------
28,181,016
---------------
FINLAND 4.2%
Amer Group Ltd., A ........................ Leisure Equipment & Products 260,100 12,733,049
Metso OYJ ................................. Machinery 930,250 12,459,892
Orion Yhtyma OYJ B ........................ Pharmaceuticals 506,900 13,056,220
---------------
38,249,161
---------------
FRANCE 1.0%
Galeries Lafayette SA ..................... Multiline Retail 55,400 9,051,725
---------------
GERMANY .9%
Celesio AG ................................ Health Care Providers & Services 151,000 7,939,963
---------------
HONG KONG 11.2%
Asia Satellite Telecommunications
Holdings Ltd. ........................... Diversified Telecommunication Services 3,187,500 6,347,276
Dah Sing Financial Holdings Ltd. .......... Commercial Banks 1,280,000 9,866,583
Fountain Set Holdings Ltd. ................ Textiles Apparel & Luxury Goods 8,684,000 6,526,513

14 | Semiannual Report
page

Templeton Global Smaller Companies Fund, Inc.

STATEMENT OF INVESTMENTS, FEBRUARY 29, 2004 (UNAUDITED) (CONTINUED)

COMMON STOCKS (CONT.)
HONG KONG (CONT.)
Giordano International Ltd. ............... Specialty Retail 31,755,348 $ 19,276,325
Hopewell Holdings Ltd. .................... Transportation Infrastructure 2,982,000 5,803,979
Hung Hing Printing Group Ltd. ............. Paper & Forest Products 20,862,508 16,617,426
Li & Fung Ltd. ............................ Distributors 4,761,000 9,297,096
Moulin International Holdings Ltd. ........ Health Care Equipment & Supplies 17,366,000 12,939,972
Techtronic Industries Co. Ltd. ............ Household Durables 3,386,621 11,225,142
Texwinca Holdings Ltd. .................... Textiles Apparel & Luxury Goods 4,564,000 3,312,833
---------------
101,213,145
---------------
INDIA 5.4%
Associated Cement Cos. Ltd. ............... Construction Materials 1,805,200 10,367,878
Gail India Ltd., GDR, 144A ................ Gas Utilities 379,910 10,352,548
Gujarat Ambuja Cements Ltd. ............... Construction Materials 2,434,480 16,608,390
Housing Development Finance Corp. Ltd. .... Thrifts & Mortgage Finance 601,660 8,112,135
Satyam Computers Services Ltd. ............ IT Services 543,622 3,720,689
---------------
49,161,640
---------------
INDONESIA .2%
PT Indosat (Persero) TBK .................. Diversified Telecommunication Services 1,029,000 2,221,082
---------------
ISRAEL 1.2%
a Orbotech Ltd. ............................. Electronic Equipment & Instruments 434,300 10,770,640
---------------
ITALY 1.1%
Banca Popolare di Verona e SCRL ........... Commercial Banks 564,800 9,754,507
---------------
JAPAN 3.1%
Meitec Corp. .............................. Commercial Services & Supplies 223,600 7,899,469
Ono Pharmaceutical Co. Ltd. ............... Pharmaceuticals 222,000 9,651,291
Sangetsu Co. Ltd. ......................... Household Durables 423,000 9,252,883
Sohgo Security Services Co. Ltd. .......... Commercial Services & Supplies 125,500 1,544,916
---------------
28,348,559
---------------
LUXEMBOURG .6%
a Thiel Logistik AG ......................... Software 629,000 5,275,338
---------------
MEXICO 2.1%
a Corporacion Geo SA, B ..................... Household Durables 267,599 1,915,481
Grupo Aeroportuario
del Sureste SA de CV, ADR ............... Transportation Infrastructure 501,760 11,013,632
Grupo Continental SA ...................... Beverages 3,158,600 6,209,006
---------------
19,138,119
---------------
NETHERLANDS 8.8%
Aalberts Industries NV .................... Industrial Conglomerates 580,403 17,596,055
Arcadis NV ................................ Commercial Services & Supplies 533,932 6,514,683
a Draka Holding NV .......................... Electrical Equipment 193,464 4,110,476
IHC Caland NV ............................. Energy Equipment & Services 142,300 6,913,174
Imtech NV ................................. Construction & Engineering 459,190 11,787,415
OPG Groep NV .............................. Health Care Providers & Services 385,100 19,187,294
Vedior NV ................................. Commercial Services & Supplies 869,000 13,647,802
---------------
79,756,899
---------------

Semiannual Report | 15
page

Templeton Global Smaller Companies Fund, Inc.

STATEMENT OF INVESTMENTS, FEBRUARY 29, 2004 (UNAUDITED) (CONTINUED)

COMMON STOCKS (CONT.)
NEW ZEALAND .9%
Fisher & Paykel Healthcare Corp. Ltd. ..... Health Care Equipment & Supplies 1,066,000 $ 8,549,688
---------------
NORWAY .6%
Norske Skogindustrier ASA, A .............. Paper & Forest Products 286,000 5,830,143
---------------
SOUTH KOREA 4.1%
Bank of Pusan ............................. Commercial Banks 1,540,670 9,720,894
Dae Duck Electronics Co. Ltd. ............. Electronic Equipment & Instruments 939,895 10,629,765
Daegu Bank Co. Ltd. ....................... Commercial Banks 689,000 3,984,013
a Halla Climate Control Co. Ltd. ............ Electrical Equipment 152,960 12,746,667
---------------
37,081,339
---------------
SPAIN 2.7%
Actividades de Construcciones
y Servicios SA .......................... Construction & Engineering 63,338 3,204,557
Sol Melia SA .............................. Hotels Restaurants & Leisure 1,256,260 11,207,269
Transportes Azkar SA ...................... Road & Rail 1,359,133 9,743,918
---------------
24,155,744
---------------
SWEDEN 2.3%
D. Carnegie & Co. AB ...................... Diversified Financial Services 1,132,536 14,376,918
Observer AB ............................... Commercial Services & Supplies 1,308,030 6,325,606
---------------
20,702,524
---------------
SWITZERLAND 3.9%
Gurit Heberlein AG, Br. ................... Chemicals 15,659 12,144,494
Kuoni Reisen Holding AG, B ................ Hotels Restaurants & Leisure 2,257 824,572
SIG Holding AG ............................ Machinery 99,000 14,732,491
Vontobel Holding AG ....................... Capital Markets 295,900 7,385,560
---------------
35,087,117
---------------
TAIWAN .3%
Taiwan Fu Hsing ........................... Household Durables 2,899,000 3,007,207
---------------
UNITED KINGDOM 7.8%
Avis Europe PLC ........................... Road & Rail 3,262,800 5,691,810
Bodycote International PLC ................ Machinery 3,448,230 9,214,904
Brambles Industries PLC ................... Commercial Services & Supplies 1,563,400 6,078,358
Burberry Group PLC ........................ Textiles Apparel & Luxury Goods 777,000 5,086,513
Burberry Group PLC, 144A .................. Textiles Apparel & Luxury Goods 724,300 4,748,241
Geest PLC ................................. Food Products 1,180,000 9,777,675
John Wood Group ........................... Oil & Gas 4,128,900 10,574,152
Kidde PLC ................................. Electrical Equipment 4,969,400 8,784,177
Novar PLC ................................. Building Products 2,493,799 6,317,223
W.H. Smith PLC ............................ Specialty Retail 806,000 4,105,911
---------------
70,378,964
---------------

16 | Semiannual Report
page

Templeton Global Smaller Companies Fund, Inc.

STATEMENT OF INVESTMENTS, FEBRUARY 29, 2004 (UNAUDITED) (CONTINUED)

COMMON STOCKS (CONT.)
UNITED STATES 11.6%
a Agile Software Corp. ...................... Internet Software & Services 317,950 $ 2,982,371
Alberto-Culver Co. ........................ Household Products 168,525 6,923,007
American Italian Pasta Co., A ............. Food Products 163,800 6,666,660
a BearingPoint Inc. ......................... Internet Software & Services 675,800 7,197,270
Central Parking Corp. ..................... Commercial Services & Supplies 568,400 10,890,544
a Coinstar Inc. ............................. Commercial Services & Supplies 546,200 9,869,834
a Gamestop Corp. ............................ Specialty Retail 707,700 13,198,605
a Gartner Inc., B ........................... IT Services 500,000 5,515,000
Hubbell Inc., B ........................... Electrical Equipment 168,700 6,697,390
a JAKKS Pacific Inc. ........................ Leisure Equipment & Products 575,000 8,331,750
a Scholastic Corp. .......................... Media 157,400 5,044,670
a Too Inc. .................................. Specialty Retail 709,500 13,608,210
a Triad Hospitals Inc. ...................... Health Care Providers & Services 229,764 8,108,372
---------------
105,033,683
---------------
TOTAL COMMON STOCKS (COST $536,204,244) 829,073,472
---------------
PREFERRED STOCKS (COST $3,879,936) 1.5%
GERMANY 1.5%
Hugo Boss AG, pfd. ........................ Textiles Apparel & Luxury Goods 577,480 13,489,338
---------------

----------------
PRINCIPAL AMOUNT
----------------

GOVERNMENT AGENCIES (COST $29,426,768) 3.2%
Federal Home Loan Bank, 0.91%, 3/01/04 .... $29,429,000 29,429,000
---------------
TOTAL INVESTMENTS BEFORE REPURCHASE
AGREEMENT (COST $569,510,948) ........... 871,991,810
---------------
REPURCHASE AGREEMENT (COST $30,000,000) 3.3%
UNITED STATES 3.3%
b Dresdner Bank AG, 1.00%, 3/01/04
(Maturity Value $30,002,500)
Collateralized by U.S. Treasury Bills,
Notes, Bonds and U.S. Government
Agency Securities. ...................... 30,000,000 30,000,000
---------------
TOTAL INVESTMENTS
(COST $599,510,948) 99.5% ............... 901,991,810
OTHER ASSETS, LESS LIABILITIES .5% ........ 4,407,748
---------------
NET ASSETS 100.0% ......................... $ 906,399,558
===============
CURRENCY ABBREVIATIONS: | CAD - Canadian Dollar

aNon-income producing.
bSee Note 1(c) regarding repurchase agreement.

Semiannual Report | See notes to financial statements. | 17
page

Templeton Global Smaller Companies Fund, Inc.

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
February 29, 2004 (unaudited)

Assets:
Investments in securities:
Cost ..................................................................................................... $ 599,510,948
=============
Value .................................................................................................... 901,991,810
Cash ...................................................................................................... 2,343
Foreign Currency, at value (Cost $4,119,821) .............................................................. 4,203,679
Receivables:
Investment securities sold ............................................................................... 1,644,025
Capital shares sold ...................................................................................... 2,066,419
Dividends and interest ................................................................................... 525,472
-------------
Total assets ........................................................................................ 910,433,748
=============

Liabilities:
Payables:
Investment securities purchased .......................................................................... 330,411
Capital shares redeemed .................................................................................. 745,204
Affiliates ............................................................................................... 955,965
Deferred tax liability (Note 1g) .......................................................................... 1,733,601
Other liabilities ......................................................................................... 269,009
-------------
Total liabilities ................................................................................... 4,034,190
-------------
Net assets, at value ............................................................................... $ 906,399,558
=============

Net assets consist of:
Undistributed net investment income ....................................................................... $ (4,660,309)
-------------
Net unrealized appreciation (depreciation) ................................................................ 300,854,561
Accumulated net realized gain (loss) ...................................................................... 6,738,595
Capital shares ............................................................................................ 603,466,711
-------------
Net assets, at value .............................................................................. $ 906,399,558
=============

18 | Semiannual Report
page

Templeton Global Smaller Companies Fund, Inc.

FINANCIAL STATEMENTS (CONTINUED)

STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
February 29, 2004 (unaudited)

CLASS A:
Net assets, at value ...................................................................................... $861,179,719
=============
Shares outstanding ........................................................................................ 96,553,758
=============
Net asset value per share a ............................................................................... $8.92
=============
Maximum offering price per share (net asset value per share / 94.25) ...................................... $9.46
=============
CLASS B:
Net assets, at value ...................................................................................... $6,677,387
=============
Shares outstanding ........................................................................................ 769,904
=============
Net asset value and maximum offering price per share a .................................................... $8.67
=============
CLASS C:
Net assets, at value ...................................................................................... $29,995,475
=============
Shares outstanding ........................................................................................ 3,406,461
=============
Net asset value and maximum offering price per share a .................................................... $8.81
=============
ADVISOR CLASS:
Net assets, at value ...................................................................................... $8,546,977
=============
Shares outstanding ........................................................................................ 957,347
=============
Net asset value and maximum offering price per share ...................................................... $8.93
=============

a Redemption price is equal to net asset value less any applicable contingent
deferred sales charge and redemption fees retained by the fund.

Semiannual Report | See notes to financial statements. | 19
page

Templeton Global Smaller Companies Fund, Inc.

FINANCIAL STATEMENTS (CONTINUED)

STATEMENT OF OPERATIONS
for the six months ended February 29, 2004 (unaudited)

Investment income:
(Net of foreign taxes of $336,112)
Dividends ................................................................................................. $ 4,344,279
Interest .................................................................................................. 149,672
------------
Total investment income .............................................................................. 4,493,951
Expenses:
Management fees (Note 3) .................................................................................. 3,002,695
Administrative fees (Note 3) .............................................................................. 537,359
Distribution fees (Note 3)
Class A .................................................................................................. 959,053
Class B .................................................................................................. 25,207
Class C .................................................................................................. 114,437
Transfer agent fees (Note 3) .............................................................................. 574,500
Custodian fees ............................................................................................ 108,000
Reports to shareholders ................................................................................... 45,000
Registration and filing fees .............................................................................. 47,000
Professional fees ......................................................................................... 71,000
Directors' fees and expenses .............................................................................. 39,500
Other ..................................................................................................... 7,800
------------
Total expenses ....................................................................................... 5,531,551
------------
Net investment income .............................................................................. (1,037,600)
------------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments (net of foreign taxes of $192,079) (Note 1g) ................................................. 64,180,310
Foreign currency transactions ............................................................................ (56,612)
------------
Net realized gain (loss) ............................................................................. 64,123,698
Net unrealized appreciation (depreciation) on:
Investments .............................................................................................. 123,819,236
Translation of assets and liabilities denominated in foreign currencies .................................. 102,734
Deferred Taxes (Note 1g) ................................................................................. (780,882)
------------
Net unrealized appreciation (depreciation) ........................................................... 123,141,088
------------
Net realized and unrealized gain (loss) .................................................................... 187,264,786
------------
Net increase (decrease) in net assets resulting from operations ............................................ $186,227,186
============

20 | See notes to financial statements. | Semiannual Report
page

Templeton Global Smaller Companies Fund, Inc.

FINANCIAL STATEMENTS (CONTINUED)

STATEMENTS OF CHANGES IN NET ASSETS
for the six months ended February 29, 2004 (unaudited)
and the year ended August 31, 2003
-----------------------------------------
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29, 2004 AUGUST 31, 2003
-----------------------------------------

Increase (decrease) in net assets:
Operations:
Net investment income (loss) ....................................................... $ (1,037,600) $ 6,516,285
Net realized gain (loss) from investments and foreign
currency transactions ............................................................. 64,123,698 (27,334,957)
Net unrealized appreciation (depreciation) on investments,
translation of assets and liabilities denominated in foreign currencies, and
deferred taxes .................................................................... 123,141,088 151,616,930
-----------------------------------
Net increase (decrease) in net assets resulting from operations ............... 186,227,186 130,798,258
Distributions to shareholders from:
Net investment income:
Class A ............................................................................ (10,007,888) (4,409,850)
Class B ............................................................................ (52,497) (6,893)
Class C ............................................................................ (159,628) (48,068)
Advisor Class ...................................................................... (86,189) (127,933)
-----------------------------------
Total distributions to shareholders .................................................. (10,306,202) (4,592,744)
Capital share transactions (Note 2):
Class A ............................................................................ 1,663,273 2,597,264
Class B ............................................................................ 2,411,732 1,315,987
Class C ............................................................................ 7,597,346 1,406,677
Advisor Class ...................................................................... 2,328,242 (5,407,925)
-----------------------------------
Total capital share transactions ..................................................... 14,000,593 (87,997)
Redemption fees (Note 1i) 22,925 10,345
Net increase (decrease) in net assets ......................................... 189,944,502 126,127,862
Net assets:
Beginning of period ................................................................. 716,455,056 590,327,194
-----------------------------------
End of period ....................................................................... $ 906,399,558 $716,455,056
===================================
Undistributed net investment income included in net assets:
End of period ....................................................................... $ (4,660,309) $ 6,683,493
===================================

Semiannual Report | See notes to financial statements. | 21
page

Templeton Global Smaller Companies Fund, Inc.

Notes to Financial Statements (unaudited)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Templeton Global Smaller Companies Fund, Inc. (the Fund), is registered under
the Investment Company Act of 1940 as a diversified, open-end investment
company. The Fund seeks to achieve long-term capital growth. Under normal market
conditions, the Fund will invest mainly in the equity securities of smaller
companies located anywhere in the world, including emerging markets. The
following summarizes the Fund's significant accounting policies.

A. SECURITY VALUATION

Securities listed or traded on a recognized national exchange or NASDAQ are
valued at the last reported sales price. Over-the-counter securities and listed
securities for which no sale is reported are valued within the range of the
latest quoted bid and asked prices. Investments in open-end mutual funds are
valued at the closing net asset value. Foreign securities are valued at the
close of trading of the foreign exchange or the NYSE, whichever is earlier. If
events occur that materially affect the values of securities after the prices or
foreign exchange rates are determined, or if market quotations are not readily
available, the securities will be valued at fair value as determined following
procedures approved by the Board of Directors.

B. FOREIGN CURRENCY TRANSLATION

Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate of such
currencies against U.S. dollars on the date of valuation. Purchases and sales of
securities and income items denominated in foreign currencies are translated
into U.S. dollars at the exchange rate in effect on the transaction date.

The Fund does not separately report the effect of changes in foreign exchange
rates from changes in market prices on securities held. Such changes are
included in net realized and unrealized gain or loss from investments.

Realized foreign exchange gains or losses arise from sales of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on securities transactions, and the difference between the recorded
amounts of dividends, interest, and foreign withholding taxes and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in foreign exchange rates
on foreign denominated assets and liabilities other than investments in
securities held at the end of the reporting period.

C. REPURCHASE AGREEMENTS

The Fund may enter into repurchase agreements, which are accounted for as a loan
by the Fund to the seller, collateralized by securities which are delivered to
the Fund's custodian. The market value, including accrued interest, of the
initial collateralization is required to be at least 102% of the dollar amount
invested by the Fund, with the value of the underlying securities marked to
market daily to maintain coverage of at least 100%. At February 29, 2004, all
repurchase agreements held by the Fund had been entered into on the last
business day of the month.

22 | Semiannual Report
page

Templeton Global Smaller Companies Fund, Inc.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

D. FOREIGN CURRENCY CONTRACTS

When the Fund purchases or sells foreign securities it may enter into foreign
exchange contracts to minimize foreign exchange risk from the trade date to the
settlement date of the transactions. A foreign exchange contract is an agreement
between two parties to exchange different currencies at an agreed upon exchange
rate on a specified date. Realized and unrealized gains and losses are included
in the Statement of Operations.

The risks of these contracts include movement in the values of the foreign
currencies relative to the U.S. dollar and the possible inability of the
counterparties to fulfill their obligations under the contracts.

E. INCOME TAXES

No provision has been made for income taxes because the Fund's policy is to
qualify as a regulated investment company under the Internal Revenue Code and to
distribute substantially all of its taxable income.

F. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS

Security transactions are accounted for on trade date. Realized gains and losses
on security transactions are determined on a specific identification basis.
Certain income from foreign securities is recorded as soon as information is
available to the Fund. Interest income and estimated expenses are accrued daily.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date.

Realized and unrealized gains and losses and net investment income, other than
class specific expenses, are allocated daily to each class of shares based upon
the relative proportion of net assets of each class.

G. DEFERRED TAXES

The Fund is subject to a tax imposed on net realized gains of securities of
certain foreign countries. The Fund records an estimated deferred tax liability
for net unrealized gains on these securities as reflected in the accompanying
financial statements.

H. ACCOUNTING ESTIMATES

The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the amounts of income
and expenses during the reporting period. Actual results could differ from those
estimates.

Semiannual Report | 23
page

Templeton Global Smaller Companies Fund, Inc.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

I. REDEMPTION FEES

Redemptions and exchanges of Fund shares held 30 days or less may be subject to
the Fund's redemption fee, which is 2% of the amount redeemed. Such fees are
retained by the Fund and accounted for as additional paid in capital.

J. GUARANTEES AND INDEMNIFICATIONS

Under the Fund's organizational documents, its officers and directors are
indemnified against certain liability arising out of the performance of their
duties to the Fund. Additionally, in the normal course of business, the Fund
enters into contracts with service providers that contain general
indemnification clauses. The Fund's maximum exposure under these arrangements is
unknown as this would involve future claims that may be made against the Fund
that have not yet occurred. However, based on experience, the Fund expects the
risk of loss to be remote.

2. CAPITAL STOCK

The Fund offers four classes of shares: Class A, Class B, Class C, and Advisor
Class shares. Each class of shares differs by its initial sales load, contingent
deferred sales charges, distribution fees, voting rights on matters affecting a
single class, and its exchange privilege.

At February 29, 2004, there were 1.5 billion shares authorized ($0.20 par value)
of which 750 million, 100 million, 550 million, and 100 million were designated
as Class A shares, Class B shares, Class C shares, and Advisor Class shares,
respectively. Transactions in the Fund's shares were as follows:

-------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29, 2004 AUGUST 31, 2003
-------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------------------------------------------------------------------

CLASS A SHARES:
Shares sold ...................... 10,827,535 $ 87,293,042 25,986,563 $ 153,546,743
Shares issued in reinvestment of
distributions ................... 1,129,990 8,565,343 725,443 3,844,845
Shares redeemed .................. (11,946,928) (94,195,112) (27,313,850) (154,794,324)
-------------------------------------------------------------------------
Net increase (decrease) .......... 10,597 $ 1,663,273 (601,844) $ 2,597,264
=========================================================================
CLASS B SHARES:
Shares sold ...................... 443,403 $ 3,413,724 640,501 $ 3,781,182
Shares issued in reinvestment of
distributions ................... 6,746 49,516 1,255 6,526
Shares redeemed .................. (135,054) (1,051,508) (434,207) (2,471,721)
-------------------------------------------------------------------------
Net increase (decrease) .......... 315,095 $ 2,411,732 207,549 $ 1,315,987
=========================================================================

24 | Semiannual Report
page

Templeton Global Smaller Companies Fund, Inc.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

2. CAPITAL STOCK (CONTINUED)

CLASS C SHARES:
Shares sold ...................... 1,431,975 $ 11,409,633 2,481,414 $ 14,159,661
Shares issued in reinvestment of
distributions ................... 17,982 133,963 8,211 43,189
Shares redeemed .................. (502,837) (3,946,250) (2,273,539) (12,796,173)
-------------------------------------------------------------------------
Net increase (decrease) .......... 947,120 $ 7,597,346 216,086 $ 1,406,677
=========================================================================
ADVISOR CLASS SHARES:
Shares sold ...................... 935,767 $ 7,364,163 1,841,440 $ 10,588,389
Shares issued in reinvestment of
distributions ................... 10,669 81,089 23,699 125,607
Shares redeemed .................. (662,807) (5,117,010) (2,963,244) (16,121,921)
-------------------------------------------------------------------------
Net increase (decrease) .......... 283,629 $ 2,328,242 (1,098,105) $ (5,407,925)
=========================================================================

3. TRANSACTIONS WITH AFFILIATES

Certain officers of the Fund are also officers or directors of the following
entities:

- -----------------------------------------------------------------------------------------------------
ENTITY AFFILIATION
- -----------------------------------------------------------------------------------------------------

Templeton Investments Counsel, LLC (TIC) Investment manager
Franklin Templeton Services, LLC (FT Services) Administrative manager
Franklin Templeton Distributors, Inc. (Distributors) Principal underwriter
Franklin Templeton Investor Services, LLC (Investor Services) Transfer agent

The Fund pays an investment management fee to TIC of 0.75% per year of the
average daily net assets of the Fund.

The Fund pays an administrative fee to FT Services based on the average daily
net assets of the Fund as follows:

- -----------------------------------------------------------------------------------------------------
ANNUALIZED FEE RATE NET ASSETS
- -----------------------------------------------------------------------------------------------------

0.150% First $200 million
0.135% Over $200 million, up to and including $700 million
0.100% Over $700 million, up to and including $1.2 billion
0.075% Over $1.2 billion

The Fund reimburses Distributors up to 0.25%, 1.00% and 1.00% per year of the
average daily net assets of Class A, Class B and Class C shares, respectively,
for costs incurred in marketing the Fund's shares under a Rule 12b-1 plan.

Under the Class A distribution plan, costs exceeding the maximum may be
reimbursed in subsequent periods. At February 29, 2004, Distributors advised the
Fund unreimbursed costs were $224,291.

Semiannual Report | 25
page

Templeton Global Smaller Companies Fund, Inc.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

3. TRANSACTIONS WITH AFFILIATES (CONTINUED)

Distributors has advised the Fund it received net commissions from sales of the
Fund's shares and received contingent deferred sales charges for the period of
$52,783 and $13,492 respectively.

The Fund paid transfer agent fees of $574,500, of which $465,375 was paid to
Investor Services.

4. INCOME TAXES

At February 29, 2004, the cost of investments and net unrealized appreciation
(depreciation) for income tax purposes were as follows:

Cost of investments ...................................... $602,163,245
------------
Unrealized appreciation .................................. 302,821,393
Unrealized depreciation .................................. (2,992,828)
------------
Net unrealized appreciation (depreciation) ............... $299,828,565
============

Net investment income and net realized gains differ for financial statement and
tax purposes primarily due to differing treatments of foreign currency
transactions and passive foreign investment company shares.

At August 31, 2003, the Fund had tax basis capital losses which may be carried
over to offset future capital gains. Such losses expire as follows:

Capital loss carryovers expiring in:
2010 .................................................... $29,450,960
-----------
2011 .................................................... 27,934,143
-----------
......................................................... $57,385,103
============

5. INVESTMENT TRANSACTIONS

Purchases and sales of investments (excluding short-term securities) for the
period ended February 29, 2004 aggregated $135,678,181 and $155,517,163,
respectively.

6. REGULATORY MATTERS

On February 4, 2004, the Securities Division of the Office of the Secretary of
the Commonwealth of Massachusetts filed an administrative complaint against
Franklin Resources, Inc. and certain of its subsidiaries (the "Company"),
alleging violations of the Massachusetts Uniform Securities Act. The complaint
arises from activity that occurred in 2001 during which time an officer of a
Company subsidiary was negotiating an agreement with an investor relating to
investments in a mutual fund and a hedge fund.

26 | Semiannual Report
page

Templeton Global Smaller Companies Fund, Inc.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

6. REGULATORY MATTERS (CONTINUED)

The Fund, in addition to other entities within Franklin Templeton Investments,
including the Company and other funds, has been named in shareholder class and
derivative lawsuits related to the matter described above, as well as actions
seeking the return of certain management and other fees to the Fund. The Fund's
management believes that the claims made in the lawsuit are without merit and it
intends to defend vigorously against the allegations. It is anticipated that the
Fund may be named in additional similar civil actions related to the matter
described above.

In addition, as part of ongoing investigations by the U.S. Securities and
Exchange Commission (the "SEC"), the U.S. Attorney for the Northern District of
California, the New York Attorney General, the California Attorney General, the
U.S. Attorney for the District of Massachusetts, the Florida Department of
Financial Services, and the Commissioner of Securities and the Attorney General
of the State of West Virginia, relating to certain practices in the mutual fund
industry, including late trading, market timing and sales compensation
arrangements, the Company and its subsidiaries, as well as certain current or
former executives and employees of the Company, have received requests for
information and/or subpoenas to testify or produce documents. The Company and
its current employees are providing documents and information in response to
these requests and subpoenas. In addition, the Company has responded to requests
for similar kinds of information from regulatory authorities in some of the
foreign countries where the Company conducts its global asset management
business.

The Staff of the SEC has informed the Company that it intends to recommend that
the Commission authorize an action against an affiliate of the Fund's investment
adviser relating to the frequent trading issues that are the subject of the
SEC's investigation. These issues were previously disclosed as being under
investigation by government authorities and the subject of an internal inquiry
by the Company in its Annual Report on Form 10-K and on its public website. The
Company currently is in discussions with the SEC Staff in an effort to resolve
the issues raised in their investigation. The Fund's management has been advised
that the Company cannot predict the likelihood of whether those discussions will
result in a settlement and, if so, the terms of such settlement. The impact, if
any, of these matters on the Fund is uncertain at this time. If the Company
finds that it bears responsibility for any unlawful or improper conduct, it has
committed to making the Fund or its shareholders whole, as appropriate.

Semiannual Report | 27
page

Templeton Global Smaller Companies Fund, Inc.

PROXY VOTING POLICIES AND PROCEDURES

The Fund has established Proxy Voting Policies and Procedures ("Policies") that
the Fund uses to determine how to vote proxies relating to portfolio securities.
Shareholders may view the Fund's complete Policies online at
franklintempleton.com. Alternatively, shareholders may request copies of the
Policies free of charge by calling the Proxy Group collect at 1-954/847-2268 or
by sending a written request to: Franklin Templeton Companies, LLC, 500 East
Broward Boulevard, Suite 1500, Fort Lauderdale, FL 33394, Attention: Proxy
Group.

28 | Semiannual Report
page

Literature Request

For a brochure and prospectus, which contains more complete information,
including charges, expenses and risks, call Franklin Templeton Investments at
1-800/DIAL BEN(R) (1-800/342-5236). Please read the prospectus carefully before
investing or sending money. To ensure the highest quality of service, we may
monitor, record and access telephone calls to or from our service departments.
These calls can be identified by the presence of a regular beeping tone.

Franklin Templeton Investments

INTERNATIONAL
Mutual European Fund
Templeton China World Fund
Templeton Developing Markets Trust
Templeton Foreign Fund
Templeton Foreign Smaller Companies Fund
Templeton International (Ex EM) Fund

GLOBAL
Franklin Global Aggressive Growth Fund
Franklin Global Growth Fund
Mutual Discovery Fund
Templeton Capital Accumulator Fund
Templeton Global Long-Short Fund
Templeton Global Opportunities Trust
Templeton Global Smaller Companies Fund
Templeton Growth Fund
Templeton World Fund

GROWTH
Franklin Aggressive Growth Fund
Franklin Capital Growth Fund
Franklin Flex Cap Growth Fund
Franklin Small-Mid Cap Growth Fund
Franklin Small Cap Growth Fund II 1

VALUE
Franklin Balance Sheet Investment Fund 2
Franklin Equity Income Fund
Franklin Large Cap Value Fund
Franklin MicroCap Value Fund 2
Franklin Small Cap Value Fund
Mutual Beacon Fund
Mutual Qualified Fund
Mutual Recovery Fund 3
Mutual Shares Fund

BLEND
Franklin Blue Chip Fund
Franklin Convertible Securities Fund
Franklin Growth Fund
Franklin Rising Dividends Fund
Franklin U.S. Long-Short Fund 4

SECTOR
Franklin Biotechnology Discovery Fund
Franklin DynaTech Fund
Franklin Global Communications Fund
Franklin Global Health Care Fund
Franklin Gold and Precious Metals Fund
Franklin Natural Resources Fund
Franklin Real Estate Securities Fund
Franklin Utilities Fund
Franklin Technology Fund
Mutual Financial Services Fund

ASSET ALLOCATION
Franklin Templeton Corefolio Allocation Fund
Franklin Templeton Founding Funds Allocation Fund

TARGET FUNDS
Franklin Templeton Conservative Target Fund
Franklin Templeton Growth Target Fund
Franklin Templeton Moderate Target Fund

INCOME
Franklin Adjustable U.S. Government Securities Fund 5
Franklin's AGE High Income Fund
Franklin Federal Money Fund 5,6
Franklin Floating Rate Daily Access Fund
Franklin Floating Rate Trust 3
Franklin Income Fund
Franklin Money Fund 5,6
Franklin Short-Intermediate U.S. Government Securities Fund 5
Franklin Strategic Income Fund
Franklin Strategic Mortgage Portfolio
Franklin Templeton Hard Currency Fund

Franklin Total Return Fund
Franklin U.S. Government Securities Fund 5
Templeton Global Bond Fund

TAX-FREE INCOME 7
NATIONAL FUNDS
Double Tax-Free Income Fund
Federal Tax-Free Income Fund
High Yield Tax-Free Income Fund
Insured Tax-Free Income Fund 8
Tax-Exempt Money Fund 5,6

LIMITED-TERM FUNDS
California Limited-Term Tax-Free Income Fund
Federal Limited-Term Tax-Free Income Fund
New York Limited-Term Tax-Free Income Fund

INTERMEDIATE-TERM FUNDS
California Intermediate-Term Tax-Free Income Fund
Federal Intermediate-Term Tax-Free Income Fund
New York Intermediate-Term Tax-Free Income Fund

STATE-SPECIFIC 7
Alabama
Arizona
California 9
Colorado
Connecticut
Florida 9
Georgia
Kentucky
Louisiana
Maryland
Massachusetts 8
Michigan 8
Minnesota 8
Missouri
New Jersey
New York 9
North Carolina
Ohio 8
Oregon
Pennsylvania
Tennessee
Virginia

INSURANCE FUNDS
Franklin Templeton Variable Insurance
Products Trust 10

1.The fund is closed to new investors. Existing shareholders can continue adding
to their accounts.
2.The fund is only open to existing shareholders as well as select retirement
plans.
3.The fund is a continuously offered, closed-end fund. Shares may be purchased
daily; there is no daily redemption. However, each quarter, pending board
approval, the fund will authorize the repurchase of 5%-25% of the outstanding
number of shares. Investors may tender all or a portion of their shares during
the tender period.
4.Upon reaching approximately $350 million in assets, the fund intends to close
to all investors.
5.An investment in the fund is neither insured nor guaranteed by the U.S.
government or by any other entity or institution.
6.No assurance exists that the fund's $1.00 per share price will be maintained.
It is possible to lose money by investing in the fund.
7.For investors subject to the alternative minimum tax, a small portion of fund
dividends may be taxable. Distributions of capital gains are generally taxable.
8.Portfolio of insured municipal securities.
9.These funds are available in two or more variations, including long-term
portfolios, portfolios of insured securities, a high-yield portfolio (CA) and
limited-term, intermediate-term and money market portfolios (CA and NY).
10.The funds of the Franklin Templeton Variable Insurance Products Trust are
generally available only through insurance company variable contracts.

02/04 Not part of the semiannual report
page
[logo omitted]
FRANKLIN(R) TEMPLETON(R)
INVESTMENTS
One Franklin Parkway
San Mateo, CA 94403-1906

| | WANT TO RECEIVE THIS DOCUMENT FASTER VIA EMAIL?
Eligible shareholders can sign up for eDelivery
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SEMIANNUAL REPORT AND SHAREHOLDER LETTER
TEMPLETON GLOBAL SMALLER
COMPANIES FUND, INC.

INVESTMENT MANAGER
Templeton Investment Counsel, LLC

SUB-ADVISOR
Franklin Templeton Investments (Asia) Limited

PRINCIPAL UNDERWRITER
Franklin Templeton Distributors, Inc.
1-800/DIAL BEN(R)
franklintempleton.com

SHAREHOLDER SERVICES
1-800/632-2301

Authorized for distribution only when accompanied or preceded by a current
Templeton Global Smaller Companies Fund, Inc. prospectus. Investors should
carefully consider a fund's investment goals, risks, charges and expenses before
investing. Like any investment in securities, the value of the Fund's portfolio
will be subject to the risk of loss from market, currency, economic, political
and other factors. The Fund and its investors are not protected from such losses
by the Investment Manager. Therefore, investors who cannot accept this risk
should not invest in shares of the Fund. To obtain a prospectus, which contains
this and other information, talk to your financial advisor, call us at
1-800/DIAL BEN(R) (1-800/342-5236) or visit franklintempleton.com. Please read
the prospectus carefully before investing.

To ensure the highest quality of service, telephone calls to or from our service
departments may be monitored, recorded and accessed. These calls can be
identified by the presence of a regular beeping tone.

103 S2004 04/04

ITEM 2. CODE OF ETHICS.

(A) THE REGISTRANT HAS ADOPTED A CODE OF ETHICS THAT APPLIES TO ITS PRINCIPAL
EXECUTIVE OFFICERS AND PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER.

(D) N/A

(F) PURSUANT TO ITEM 10(A), THE REGISTRANT IS ATTACHING AS AN EXHIBIT A COPY OF
ITS CODE OF ETHICS THAT APPLIES TO ITS PRINCIPAL EXECUTIVE OFFICERS FINANCIAL
AND ACCOUNTING OFFICER.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

(A)(1) THE REGISTRANT HAS AN AUDIT COMMITTEE FINANCIAL EXPERT SERVING ON ITS
AUDIT COMMITTEE.

(2) THE AUDIT COMMITTEE FINANCIAL EXPERT IS FRED R. MILLSAPS AND HE IS
"INDEPENDENT" AS DEFINED UNDER THE RELEVANT SECURITIES AND EXCHANGE COMMISSION
RULES AND RELEASES.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS N/A

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES. N/A

ITEM 8. PURCHASE OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANIES AND AFFILIATED PURCHASERS. N/A

ITEM 9. SUBMISSTION OF MATTERS OF A VOTE SECURITY HOLDERS.

There have been no changes to the procedures by which shareholders may recommend
nominees to the Registrant's Board of Directors that would require disclosure
herein.

ITEM 10. CONTROLS AND PROCEDURES.

(a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Registrant maintains
disclosure controls and procedures that are designed to ensure that information
required to be disclosed in the Registrant's filings under the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 is recorded,
processed, summarized and reported within the periods specified in the rules and
forms of the Securities and Exchange Commission. Such information is accumulated
and communicated to the Registrant's management, including its principal
executive officer and principal financial officer, as appropriate, to allow
timely decisions regarding required disclosure. The Registrant's management,
including the principal executive officer and the principal financial officer,
recognizes that any set of controls and procedures, no matter how well designed
and operated, can provide only reasonable assurance of achieving the desired
control objectives.

Within 90 days prior to the filing date of this Shareholder Report on Form
N-CSR, the Registrant had carried out an evaluation, under the supervision and
with the participation of the Registrant's management, including the
Registrant's principal executive officer and the Registrant's principal
financial officer, of the effectiveness of the design and operation of the
Registrant's disclosure controls and procedures. Based on such evaluation, the
Registrant's principal executive officer and principal financial officer
concluded that the Registrant's disclosure controls and procedures are
effective.

(B) CHANGES IN INTERNAL CONTROLS. There have been no significant changes in the
Registrant's internal controls or in other factors that could significantly
affect the internal controls subsequent to the date of their evaluation in
connection with the preparation of this Shareholder Report on Form N-CSR.

ITEM 11. EXHIBITS

(A) CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS.

(B)(1) CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
OF JIMMY D. GAMBILL, CHIEF EXECUTIVE OFFICER - FINANCE AND ADMINISTRATION, AND
DIOMEDES LOO-TAM, CHIEF FINANCIAL OFFICER

(B)(2) CERTIFICATIONS PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
OF JIMMY D. GAMBILL, CHIEF EXECUTIVE OFFICER - FINANCE AND ADMINISTRATION, AND
DIOMEDES LOO-TAM, CHIEF FINANCIAL OFFICER

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

TEMPLETON GLOBAL SMALLER COMPANIES FUND, INC.

By /s/JIMMY D. GAMBILL
Chief Executive Officer - Finance and Administration
Date April 30, 2004

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

By /s/JIMMY D. GAMBILL
Chief Executive Officer - Finance and Administration
Date April 30, 2004

By /s/DIOMEDES LOO-TAM
Chief Financial Officer
Date April 30, 2004